Comprehensive Tax Reform Incoming: Middle Class Focus Without Social Security Cuts

A comprehensive tax reform is set to be announced by Prime Minister Kyriakos Mitsotakis at the DETh in September, according to Deputy Prime Minister Kostas Chatzidakis. The new tax measures aim primarily at providing relief to the middle class, a key electoral audience for the government as it prepares for elections planned for early 2027. While there will be no reductions in social security contributions, the strategy focuses on lowering tax rates to give breathing room to the middle class, which has historically supported New Democracy. This fiscal strategy aims to boost government approval ratings to around 33%. Key factors influencing these decisions include budget execution, tourism’s contribution to GDP, discussions with the EU regarding permanent tax evasion measures, and negotiations over defense spending exemptions. Despite internal dissent within the party, Chatzidakis remains closely aligned with Finance Minister Christos Pierrikakos in crafting this approach. Meanwhile, political dynamics in Thessaloniki and Hydra highlight shifts within opposition parties and former political figures like Andreas Andrianopoulos observing from afar.